NEW YORK (
Bank of America
used a double-negative on Monday to deflect responsibility for controversial
bonuses: Investors should have known about them, because BofA never said they wouldn't be distributed.
In a court filing to federal Judge Jed Rakoff in Manhattan, BofA says it was "widely understood" that the bonuses would be distributed at year-end.
A proxy statement distributed to BofA investors in November said that bonuses needed to be approved by BofA management. The firm argues in the court filing that it never told investors that it wouldn't approve those bonuses. It doesn't explain, however, why it did not also distribute a document outlining the $5.8 billion in bonuses that were approved, as Merrill's losses escalated at year-end.
Securities and Exchange Commission
slapped Bank of America with a $33 million fine for not disclosing more information about the bonuses and losses. When the two parties sent paperwork to Judge Rakoff for approval,
he demanded more information about who, specifically, signed off on the awards, and how the $33 million settlement was reached.
The SEC is expected to file information arguing that the settlement -- which some call petty cash -- is adequate, given the troubled bank's circumstances.
-- Written by Lauren Tara LaCapra in New York